[miningmx.com] — Zimbabwe’s gold producers could lose up to $8 million this month because of a mineworkers’ strike over pay, a top industry official said on Friday, as the industrial action threatened the industry’s fragile recovery.
The 25,000-member Associated Mineworkers’ Union of Zimbabwe (AMWUZ) started a strike on Wednesday for a monthly minimum wage of $496 from the current average of $120.
The mining sector has overtaken agriculture as Zimbabwe’s main foreign currency earner, after President Robert Mugabe’s seizure of white-owned farms to resettle landless blacks triggered a sharp decline in farming output.
The strike is a setback for mines, most of which only recently re-opened after closing in 2008 because of hyperinflation, a skewed exchange rate and frequent power cuts, officials said.
“The impact is serious. As we speak, we are talking about 8,000 ounces, that’s about $8 million,” said Collen Gura, the chief executive of Metallon Gold, Zimbabwe’s biggest gold miner.
He added that labour made up 60 percent of total production costs and that wage increases would drive firms into deeper losses.
“Mines were closed for a long time and are only now starting to find their feet. To my knowledge, there is no gold mine currently turning in a profit,” Gura said.
Gura said Metallon, which accounts for over half of Zimbabwe’s gold output from its five mines, had been set back by the strike just when it expected to raise production.
“We were ready to take off and raise our monthly production from 3,800 ounces to 6,000 ounces, where we need to be to operate profitably,” he said.
“This (strike) is a huge drain on mines, most of which are operating on borrowed funding.”
ZIMPLATS, MIMOSA NOT AFFECTED
AMWUZ president Tinago Ruzive told Reuters that Impala Platinum’s local unit Zimplats and Aquarius’ Mimosa were not affected by the strike.
“Zimplats and Mimosa gave their employees an increase ranging from $240 to $250 for the lowest paid worker and because of that, their workers are not on strike,” Ruzive said.
“We have no problems with individual mining houses, but with the Chamber of Mines, which is refusing to negotiate. We had an award from an arbitrator, which the Chamber refused to honour.”
Zimplats and Mimosa officials were not immediately available to comment.
Chamber of Mines official Doug Verden said efforts were underway to resolve the strike, but declined to give details.
“There is indeed a strike action, but I cannot comment much on that as we are trying to deal with it. This, and power shortages, obviously hurt efforts to improve production,” Verden said.
Finance Minister Tendai Biti has said the sector will grow by 40 percent in 2010, on the back of re-opening mines.
At its peak Zimbabwe used to produce 2,400 kg of gold per month but recorded a low of just over 3,000 kg for the whole year in 2008.